Morgan Stanley, along with Goldman Sachs Group Inc (GS.N), historically has been one of the most active banks trading in commodities.

While the business has generated billions of dollars in revenues for Morgan Stanley through the years, it has come under pressure from weaker trading volumes as well as new regulations that will limit U.S. banks’ trading, risk taking and ability to own physical commodity assets.

CNBC cited regulatory reforms as the reason for a possible sale.

There are also signs that Morgan Stanley’s competitive position is slipping. According to a survey by Greenwich Associates, the bank has fallen to fourth place in the over-the-counter market for commodity derivatives among corporations and investors, behind JPMorgan Chase & Co (JPM.N), Goldman and Barclays Plc’s (BARC.L) Barclays Capital unit.

Morgan Stanley’s commodities trading revenue dropped nearly 60 percent from 2009 to 2011. Based on Reuters’ calculations, revenues peaked at around $3 billion in 2008, declining to about $1.3 billion last year, the lowest since 2005.